The future of money: Understanding the CBDC revolution
For the longest time, central banks held the head seat for being policy makers and regulators - sentinels over all things financial. They drafted the rulebook and enforced it. Understandably, their efforts came in for high praise, too.
But the world since has changed. In all its entirety, some may argue. Governments can no longer function as administrators alone; in a world dominated by digital wallets, encrypted keys, tokenisation, ledger technology and of course, AI, it would be remiss of them to view themselves as mere gatekeepers. It is therefore essential for regulators to also become shapers of behaviours and markets – agile, collaborative and if required, avant-garde.
This was perhaps the spirit behind the notion of Central Banks considering their own digital currencies. So, what is a central bank digital currency (CBDC)? It is digital money issued by the central bank. Similar to how cash is a physical claim on the central bank, a CBDC is a claim in digital form.
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